It’s perfectly OK to be average — unless, it seems, you’re looking for a job in a warehouse. Preliminary results of a study conducted by Miami University and the Warehousing Education and Research Council (WERC) show that 76% of 50 private warehouses surveyed have trouble finding high-quality employees, and consider this factor their top operational challenge. Retaining effective workers comes in a close second, with 59% citing this as a major problem.
People-related concerns rank higher on the list of challenges than such traditional indicators of performance as meeting goals for order accuracy (41%) and on-time delivery (33%). Forty-six percent of respondents report difficulty with managing hourly labor and recruiting skilled management — which might well explain why a significant number of warehouses find it tough to manage inventory effectively (54%) and run an efficient operation (52%). Technology, touted as the savior of many a business, ranks fairly low on respondents’ roster of concerns: Only 22% say that having state-of-the-art IT is important.
On the upside, respondents report a strong emphasis on monitoring warehouse performance, with 93% tracking and reporting costs. However, the level of detail at which they do this varies. Sixty percent include corporate and logistics overhead costs in their assessment. Sixty-five percent measure warehouse cost as a percentage of sales, but fewer than half (41%) track cost per order and handling charges per case. Those who keep tabs on total annual warehouse cost are even fewer, amounting to 39% of survey respondents. Just one-fifth of private warehouses allocate warehouse cost to products and track storage cost per case.
Using space creatively is a key measure of warehouse efficiency, but 20% of respondents do not use all available storage space. The average facility assigns 49% of its space to storage; 16% to aisles; 15% to picking areas, 12% to staging areas; 3% each to cross-docking and reworking; and 2% to other uses.
For more information, contact WERC at 1100 Jorie Boulevard, Suite 170, Oak Brook, IL 60523; phone: (630) 990-0001; e-mail: firstname.lastname@example.org.
Puttin’ On the Ritz
|Order accuracy||96.9% of orders|
|Orders shipped on time||95.8%|
|Warehouse order cycle time||4.0 days|
|Annual inventory turns||10.1 turns|
|Warehouse G&A to wholesale cost||28.6%|
|Available storage space used||80.0%|
A Day in the Life
|WAREHOUSE ACTIVITY||% OF
|Packing and palletizing||10%|
|Replenishing pick slots||7%|